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Australia Tax Bill gets passed in the lower senate

The lower house of the Australian parliament has passed the government’s plan to impose 30% tax on big mining companies. However, it will still have to go through the upper senate early on next year, but most likely it will be passed there also.

This is believed to be one of the ways through which the government is planning to distribute wealth more evenly from the boom of the resources. The bill will come into effect from from July 2012, and will apply to mining giants such as Rio Tinto and BHP Billiton. The bill, namely ‘The Minerals Resource Rent Tax Bill’ is basically designed to tax coal and iron profits.

After this tax gets passed as a law, mining companies will have to pay about $11bn Australian dollars ($10.8bn; £6.9bn) in charges in the first three years of the tax.

The government says that the money raised will go towards reducing taxes on other companies, and helping the government bring the budget to surplus next financial year.

According to Treasurer Wayne Swan to Parliament, – This is a way in which all Australians share in the bounty of the mining boom.

With huge demands coming up from Asian countries like India and China, Australia’s iron ore exports rose to a record high in September of $6.3bn Australian dollars.

This proposed tax bill has actually led to debate over the country for the past one and a half years. Actually, rising Chinese demand has driven up the price of Australia’s iron ore and coal. The conservative opposition is against the tax, arguing that it would deter foreign investment in the mining sector driving it overseas and resulting in job losses for Australians.

The Tax Bill passed in the lower senate narrowly with 73 votes to 71 with support by the Greens, a leftist liberal party.